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I3 UPDATE / ENTOVATION International News
No. 36: January 2000

Contents

How Was It For You? - David Skyrme
New Millennium, New Knowledge Challenges - David Skyrme
Progression: From Free to Fee - David Skyrme
Confessions of a Y2K Watcher - Jan Wyllie
Snippets - Knowledge Trading on Trial, Web Updates
Events

Editorial

Welcome to the first edition of I3 UPDATE / ENTOVATION International News for the new year and new millennium. How was the year change over for you? We start this edition on a personal note of how it was for me, before reflecting on what the knowledge agenda might be in the next few years, plus another of our 7Ps of Internet marketing and a Y2K 'confession' from Jan Wyllie.

Back issues of I3 UPDATE can be found at http://www.skyrme.com/updates/ We are several months behind with the archives but expect to have them with much more content on our new web-site by the end of the month. As usual we welcome your comments and feedback.

I3 UPDATE is also available by email. See the administrative information page for how to join or leave the mail list.

David J. Skyrme
Managing Editor


How Was It For You?

David Skyrme

Many of us watched on that marvel of 20th century technology, the television, how different people celebrated the turn of the year -- from the simple ceremonies in several Pacific islands, the Olympics warm-up fireworks from Sydney, the spectacular display on the Eiffel Tower, and President Mandela's symbolic event on Robins Island.

We, probably like many of you, celebrated with friends. But as the midnight hour approached our group did something our forebears probably did in millennia past. We walked up a local landmark - the aptly named Beacon Hill, an iron age hill fort, though with the aid of 20th century technology in the form of battery-driven torches. Even so it was dark, very steep and slippery. And at the top we joined around 150 others (including the local Lord and Bishop) by a lighted beacon (not your little beacon but a big fire some 5 metres high), said prayers, sung Jerusalem, gave a cheer, opened the bubbly, and looked around. Unfortunately the hill was in the mist (typical of the British weather!) as well as the heavy smoke from the fire (!!), so we could only hear and not see the fireworks from local villages and the main town some 7 km away. Although several thousand beacons were lit across Britain we could not see the one on the neighbouring hill! However, as we later slithered down, the invisible beacon nevertheless sent a volcanic like glow upwards to the heavens. A lasting memory.

And then, when we switched on our computers and they (mostly) worked like they did in 1999, we wondered what all the Y2K fuss what about. Like many "what-ifs" in history, we shall never know whether a different turn of events would have happened if the effort in addressing the 'bug' had not been applied. Certainly there were (and still are) Y2K related IT problems, but how much worse are they than many of the other IT problems we see day in day out?

So now we are in a new millennium. Does it feel any different? We carry on with our tasks from last month, and work towards fulfilling our goals and aspirations. Dating a cheque 15/01/00 no longer seems an oddity (unless you use the US dating system!). Daily life goes on, interspersed with those memorable occasions that form part of our collective experiences. I hope that your millennium experience was as memorable as mine, and wish you every success for the coming year.


New Millennium; New Knowledge Challenges

David Skyrme

The end of the last decade saw a growth of knowledge management practice and its supporting industry - of software products, seminars, publications and consultancy. In previous I3 UPDATEs (e.g. No. 20, June 1998) we have suggested future trends, many of which are unfolding before us.

Coping with Unorthodox Knowledge

An inescapable fact is that new knowledge is being generated at a prodigious rate. We are on the threshold of amazing breakthroughs in new applications of knowledge in fields such as genetics and nano-engineering. Yet many breakthroughs confront orthodox thinking. We can think back to building machines that fly, iron ships that float, bombs that bounce on water, a clockwork radio, and a timely one - the search for precision timepieces to determine Longitude (incidentally Dava Sobel's book of that name - available from Amazon.com or Amazon.co.uk - was dramatized on television over the recent holiday period). In each case, the inventors involved (John Harrison, Barnes Wallis, Trevor Bayliss et. al.) faced skepticism or even ridicule from "those in the know" - the scientific and government establishment. The new knowledge was outside their realms of credibility.

Therefore one of the challenges facing many decision maker today, is that of assessing new knowledge. It also often takes guts to take difficult decisions even when there is no rigorous scientific validation of this new knowledge. The powers of herbal remedies, the consequences of global warming, and the cross-over to humans of animal viruses like BSE, are situations which may defy orthodox scientific proof, but where there is sufficient evidence to adopt precautionary measures- shades of Y2K? Only this week a new research report suggested that investment in breast cancer screening may be misspent - on balance it may do more harm (i.e. treating false positives) than not doing it (though tell that to someone who has suffered and where early diagnosis has saved their life). Knowledge brings new insights but it also brings new unknowns. There's a lot of truth in the adage "a little knowledge is a dangerous thing". Adressing this challenge requires having an open mind, and developing new methods of decision making and risk assessment based on uncertain knowledge and multiple plausible future scenarios.

Knowledge for the Common Good

Another challenge we are increasingly seeing, is that of ownership and exploitation of knowledge for the common good. In the field of genetics mentioned earlier, there has been a debate between those who believe genetic information should be widely accessible (at little or no cost) and pharmaceutical companies and others that want to protect some of this knowledge in order to patent drugs. Some even seek to patent medicines whose knowledge is widely known among local healers and witch doctors in the developing world. For example, Tom McGirk writing in Time (30 November 1998), discusses bio-prospecting where Western companies are actively seeking out knowledge of the medicinal properties of plants, with a view to patenting them. "What right", he asks, do they have the right to claim ownership to the innermost workings of a living organism?"

One side of the argument says that if new knowledge brings significant human benefits not achievable in other ways, then it should be made widely available. The other side argues that to develop (to robustness for routine applications) and validate knowledge needs considerable investment that would not be forthcoming without the prospect of commercial reward. An example of the kind of situation that such cost recovery causes is cited in this week's press. Computer users in developing countries are hindered because the cost of anti-virus software and their updates, costs 10-times or more relative to basic necessities than in developed countries. Monsanto's so called terminator seed and the license fee demanded by Unisys for creating gif images (because they hold the patent) are other examples where a commercial company is seeking rewards others see as inappropriate (even immoral) for knowledge and invention. How does one draw a balance to suit everyone, in a global world where prosperity levels and values vary widely?

At what level should commercially developed knowledge, that has high potential (e.g. a cancer cure) be subject to wider market and price regulation rather than the current patent laws and marketing mechanisms? Will normal market economics mean that the knowledge that such breakthroughs have been made mean that rivals will emerge with cheaper alternatives should a knowledge owner demand too high a price?

Knowledge Governance and Ethics

The above situation is an illustration of the growing ethical and governance challenges surrounding knowledge. Perhaps what is needed is some form of international knowledge governance, just as we have governance of commercial organizations and financial services. This goes far beyond current intellectual property laws. In 'Forward to the Future', chapter 10 of my book Knowledge Networking: Creating the Collaborative Enterprise, I raise several ethical and governance questions:

  • How far should an organization exploit an individual’s prior or private knowledge for its own benefit?
  • What rights does an employee have to share in the rewards of such knowledge?
  • How should knowledge markets be regulated?
  • What controls are needed to tame ‘wild agents’ - autonomous intelligent agents with undesirable characteristics, that either through poor design or malice roam networks causing havoc with legitimate trading?

I'm sure you can think of some others (let me know!).

A New Era of Consciousness

With these and many other more practical challenges, participially those brought about by the ease of transferring information over the Internet (such as validation of authenticity and quality), the challenges that surround knowledge, its management and governance will assume a greater importance for decision makers in organizations, but more importantly global policy makers. The last years of previous millennium have seen a growing consciousness of the contribution of knowledge to organizational performance and national prosperity. There has also seen remarkable progress in the development of practical solutions to manage knowledge better. However, as we start the new millennium we need to raise the consciousness of these more fundamental challenges and to debate the kind of knowledge futures we all seek.

Your thoughts and feedback on this topic will be particularly welcome - and do please be creative and challenge orthodox thinking!

Email: david@skyrme.com


Progression: From Free to Fee

David J. Skyrme

This is the fifth in our series of the 7Ps of Intenet Marketing (to date we have covered Portals, Packaging, Positioning and Page impressions). Of course the sub-title could read "Fee to Free", since many of the early providers of information on the Internet (particularly newspaper and magazine publishers) have found that users will not fill out lengthy registration forms and also pay for the privilege of reading one or two articles. There is, as every Internet user knows, much that is free, and (despite the protestations of those who charge hefty subscriptions for 'unlimited access') of excellent quality.

Free vs. Free

Here are some reasons why much information is free:

  • It is written as a side-line by academics or others wishing to stake a position
  • So that it can be read by as wide an audience as possible e.g. to make a site attractive to advertisers
  • It has been superceded by more up to date information
  • It provides sample of the quality of other information available from the same source
  • It is used as a 'come on' for other fee paying information or services.

In short, free information helps build presence, visibility and convey quality and reputation. In contrast there are many good reasons why Internet sites should charge for access to their information and services:

  • There is a cost associated with creation, compilation and packaging
  • The information is valuable to the user and justifies pricing commensurate with quality
  • The site provides a 'one-stop-shop' with information that is classified and easy to find
  • It would undermine other formats for the same information e.g. hard-copy publications
  • The information is unique and not available elsewhere
  • It is accompanied by surrounding services e.g. an advice line, email alerts and updates.

For this reason, many providers of free information also provide a complementary fee paying service. Thus, although much of the Financial Times (http://www.ft.com) site is free, it will cost you to read certain articles from the archive. If you want to make money from the Internet, and not just treat it as a marketing channel (for which of course it can be very effective), then the general rule is that you need both free and fee based offerings. So whether a site progressed from free to fee, or fee to free, the chances are that today they offer both. There are two types of progression I want to consider in this articles - that of the evolution of a web site, and that of progressing a user through stages of use.

Web Site Progression

Most organizations go through a series of stages in developing their Internet business along the following lines.

  • Brochureware - putting existing text media online - although quick, it is generally not very effective since the material has been written for a different medium
  • Limited interaction - e.g. providing contact details and email address hyperlinks (mailtos). Even today many sites do not make it easy to communicate with knowledgeable staff
  • Online catalogues - more helpful information and guidance to customers in choosing appropriate products and services
  • Ecommerce - adds shopping baskets and methods of payment
  • More intensive interaction - adding facilities to learn more about customers e.g. via registration forms, but more effectively via 'communities' (discussion areas
  • Customization and relationship building - in-depth knowledge acquisition and sharing; analyzing customer usage patterns, and customizing what pages they then see; use of email to alert them of relevant updates.

The more developed sites increase ways of creating two-way dialogue, not just buyer to seller, but among buyers e.g. through so-called communities, where they can share information about products and services with each other. This is the modus operandi of a site like Deja (http:www.deja.com), for example. It is of course possible to change the order of evolution depending on your strengths. Thus some businesses will focus on community and relationship building before delving into ecommerce (somewhat like our own). What surprises us is that many traditional and smaller companies, often because they outsource their web work are still trapped into the brochureware age, do not readily respond to emails, and when you phone them up they apologize that the online brochure is out of date and will sent you a copy of their latest one in the post!

Each phase of evolution requires a different type of investment and different skills. If you have a web presence, or are planning one, rate yourself against the various phases - put down some costs and benefits, describe the activities carried out and skills used, list the intended and actual outcomes, assess what helped and hindered you in this phase, and finally, identify areas for improvement and outline future plans. In short, derive some lessons and knowledge from your own evolution and progression that will guide you to better success. Common lessons are that the effort to market a web-site and to keep it updated, fresh and sustained are often ignored or underestimated. What others can you add?

Customer Progression

This is the progression of the user involvement - from a casual reader to an ongoing customer relationship. It takes the user over time through the sales cycle of suspect, prospect, lead, to customer. The art of progression is to lead the user, step by step to being a valued customer. If your basic business is selling high priced (and complex) products or services (like expensive software packages or consultancy) you need to consider what you offer at lower price breaks, e.g. something for free, the $10 product, the $100 product, the $1000 product and so on. At each stage of progression you care giving the customer value for money, giving them something they want, conveying your quality, and smoothing the pathway to your premium offerings. A good progression in a knowledge-based business is something like:

    Something for free - last year's analysis; a version of restricted functionality, a trial period (that's how software packages are sold e.g. the Lite versions, the 30-day trial)
  • Something in return for disclosing information e.g. registering details to receive free monthly newsletter
  • A low cost item - Obviously you will need an efficient payment mechanisms (e,g, online shop) or use a trading platform if you are to cover you costs.
  • Higher value items - help the user be confident that they will get value for money through devices such as samples, extracts, money back guarantees, direct contact and dialogue
  • Premium items - most will require individual selling in which some one-tone dialogue perhaps in the form a of a phone call is necessary to respond to queries, bouts, and to do the good old fashioned benefit selling.

At each stage of the progression, you will provide the user with offers that make it attractive to progress further. For example, you may take the purchase price of a low ticket item as a credit for any higher priced item order within the next few months. Your challenge is to keep giving the user a reason to come back to your site and deepen the relationship. Regularly updated content, limited time offers, customization, email alerts, are all ways that good Internet businesses do this. You can learn much from the well developed sites like Amazon.com and Dell.

Use the full range of Internet marketing devices to move along the sales cycle from unaware - aware - interested - committed viz.

Transition 1. From Unaware to Aware. Make your site known through using Portals (I3 UPDATE No. 31) and Positioning (I3 UPDATE No. 34). Be active in relevant online forums and steer potential customers to helpful pages on your site. Make good use of META tags, so that your site features prominently in relevant searches using search engines. Also use conventional marketing methods to publicize your web site, such as free publicity through articles and conference presentations. If potential customers don't know you exist, you have not even reached the first rung of the marketing ladder.

Transition 2 - From Aware to Interested. You have to grab people's attention within the first few seconds and make them want to read more, hence the importance of Page Impressions (I3 UPDATE No. 35). Provide plenty of relevant and useful content. Be user focused - helping them with problem solving, product selection and frequently asked questions, rather than merely promoting your products. Let people register their interest through a simple form, and keep them informed of developments and offers via targeted email (not spam!). Keep key pages fresh with interesting and updated content, so that users return and one day progress through the next transition...

Transition 3 - From Interested to Committed. To make this transition you have to make it easy to do business with you. This means answering their detailed questions as they are on the point of deciding. So think of what they might ask and have ready answers. Provide obvious contact points e.g. an email contact for knowledgeable and responsive answers (not just links to your webmaster). If you are serious about Internet marketing you will view your email response system in the same way as a telephone call handling system. Then make it easy to buy - an appropriate ecommerce solution with shopping basket and choice of payment mechanisms. And once they have committed, maintain the dialogue e.g. through workflow initiated emails and by giving privileged access to customer web ages e.g. support information, updates, customer forums, special offers.

Factors in successful progression are straightforward - it's a combination of basic marketing, an effective web site (both design and implementation) and good customer relationship management (based on market and customer knowledge). However, many traditional companies seem to lose sight of one of more of these once they go online. There are only a few companies like Dell or Amazon that seem to effectively integrate all three. There are still plenty of opportunities for new dot.coms to show the way and plenty of scope for established companies to improve their progression - from free to fee.

Email: david:skyrme.com

Update - Other articles in this series The 7Ps of Internet Marketing cover Portals, Packaging, Positioning, Page Impressions and Payments.


Confessions of a Y2K Watcher

Jan Wyllie

After four years of watching Y2K unfold for Trend Monitor and its customers ...

I give thanks that the good earth still breaks between my fingers. I give thanks that I can still plant four rows of broadbeans for harvesting in June and 16 cabbages for harvesting in May without fear of nuclear fallout. Even though I discovered that human health is already being affected by low-level radiation, I must give my heartfelt thanks to everyone in the nuclear industries for their professionalism and diligence in the face of a daunting challenge. My view of the people involved in nuclear work changed from clever incompetents in the service of greed to misinformed heros who have dedicated their lives to the awesome task of saving the earth from a technology which they didn't invent and which is an ever-present threat to life on earth.

The engineers responsible for electricity, transport and telecommunications infrastructure, also deserve great praise. Thank goodness that the exacting practice and culture of engineering was deployed in our most crucial line of defence. These are the people that since ancient times built artifacts and made them work in the physical world. This engineering culture is what keeps machines and assembly lines going. So there is a good chance that industrial production systems will remain relatively unscathed. I do think we were lucky, though, that embedded chips do not seem to have been as problematic as the influential Dr. Paula Gordon believed them to be. But, as she herself has said many times, difficulties arising from malfunctioning chips would not necessarily expose themselves on millennium night. Besides well over 50 per cent of embedded chip applications were reported to be shut down during the roll-over period. The real question is what will happen when they are switched on again. Still, my faith in the engineering culture is now much stronger. There is a good chance that breakdowns, if they occur, can be worked around quickly, if not fixed immediately. People are at their best in a physical crisis.

I am not nearly so confident of the practice and culture of software development and management which are essentially black arts despite their pretensions to science and engineering. These are the people who never finish projects on time, that habitually deliver code that is full of bugs, not because they are fools or charletans, but because of the scale of abstract complexity of the virtual world in which they work. These are the people involved in "remediating" the mainframe and PC software systems on which management, finance and administration are based. If these systems malfunction, trade -- especially international trade -- will become very difficult and expensive. The consequences of these kinds of difficulties are job losses, bankruptcies, shortages, price rises, panic buying and social unrest . Still, thanks to the engineers, the lights will still be on, people are unlikely to be freezing in the dark ... at least not this winter.

Since publishing our first Y2K report in 1996, Trend Monitor has being saying that the consequences of Y2K would play out over a period of months, possibly years. At least there is no longer a deadline. Now there is lots of time, quite literally all the time in the world, both to discover and to respond to the consequences -- amplify the good ones and diminish the bad ones.

For me the greatest thanks must to Y2K itself for what it has done for me. It changed the way I thought about my life and much more importantly the way I am living it. I saw how dependent I was on technologies which were outside of my control. I understood the selfish wastefulness of car-centred existence. I noted that unnecessary air travel is still wreaking havoc with the ozone layer, years after the Montreal treaty banned CFCs. I comprehended that the global economy was not all powerful, but was instead extremely fragile. With the help of David Abrams who wrote The Spell of the Sensuous and Ted Lumley's friendly influence, encouragement and insight, I began to hear and feel the surround-sound music and geometry of multifaceted, complex space. I become conscious that our "problems" could have no "solutions" since insurmountable difficulties arise from assumptions based on a simplistic way of thinking about the world.

In short, I have come to believe that complexity and relativity, not to mention quantum physics, have rendered our culturally-inspired relationship with reality -- as being objects in three dimensional space manipulated by cause and effect -- an insufficient basis, both for understanding and acting in the world. As any fully-conscious child can tell you, there's a whole more going on in the mind than that. But, as Ted says, that knowledge is quickly educated out of children by parents and schools. Y2K also gave me the insight that inquiry and talking are more of a means than an end. Y2K precipated great torrents of very high quality writing expressing inspiring insights into the implications of the way we live and think on the sustaining world around us.

For me, by far the most important consequence of Y2K has been the feeling of earth between the fingers, entering the cycle of seasons -- sowing, tending and harvesting -- experiencing, first hand, the enormous bounty of natural world. The effort that is required is playing outside ... away from the infernal computing machine which generates money and fascination. The greatest joy, though, is that now there is a chance that many others will be able to experience the earthing which gives such succor.

All I can say now in January 2000 is so far so good ...

Our Webpages at http://www.trendmonitor.com gives a record of how the Y2K story unfolded from 1996. Most recent (Jan 2000) is a synthesis of "The Last Words of the British Press" and our latest commentary of what will happen and why.

Email: jan@trendmonitor.com
Trend Monitor International
"Only What You Need to Know"


Snippets

Knowledge Trading on Trial - iqport update

You may recall that we had promised a special edition on knowledge trading. In fact, it was ready to go in early December, but since we featured iqport heavily and had some concerns about status and usability, we awaited (in vain) for formal responses to our questions. Now the reasons for obfurscation seems clear. NatWest (the main backers of iqport) have decided to end the trial at the end of January: "In the context of NatWest's wider e-commerce strategy, a decision has been made not to proceed to full scale commercial trading with iqport.com." It is not clear whether other backers (who include Lotus and Oracle) will find other ways to keep iqport alive. We ourselves are looking for other outlets for our knowledge assets. A suitably edited version of our special edition will be put for the record into the I3 UPDATE archive. In the meantime I3 UPDATE will keep you informed of developments in the knowledge markets arena.

Web Updates

The recently improved ENTOVATION web site (http://www.entovation.com) continues to attract growing interest and traffic (up over 50 per cent in the two months since its relaunch). It has also moved to a new server in Canda. In the What's New section you will find The Knowledge Millennium Generation, an interesting summary of trends identified by Univeristy of Cologne students.

Work on the revamped Knowledge Connections (http://www.skyrme.com) site continues, with much more new content, new guidelines, and themed contents pages. Because of the changes in iqport, we are seeking other outlets for knowledge assets. The launch of the new site complete with missing I3 UPDATE archives is delayed a further few weeks.


Events

23-25 January 2000. The 2nd Annual Braintrust International, 2000 Conference: Advancing Your Knowledge Management Practice for Measurable Business Impact. It claims "not the usual cast of characters" but "fresh perspectives from organizations that are in the trenches, ‘doing' knowledge management on a daily basis". Scottsdale, Arizona. IIR
http://www.brain-trust.net

28 Feb - 3 March, 2000. 2nd Knowledge Management and Organizational Learning Conference, London. A bevy of well known speakers including Drucker and Nonaka. Linkage International.
http://www.linkage.com

20-21 March 2000. Managing and Measuring Your Intellectual Capital - Account for Your Knowledge Advantage. Walt Disney World Resort, Lake Buena Vista. IIR.
http://www.iir-ny.com

27-28 March 2000. Tacit Knowledge Roundtable - Developing, Capturing, and Leveraging Your Employee's Expertise to Drive Profit. Atlanta. IIR.
http://www.iir-ny.com


© Copyright, 2000. David Skyrme Associates Limited and Authors - All rights reserved.

This newsletter is copyright material. In the interests of dissemination of information, forward circulation is permitted provided it is distributed in its entirety including these notices, that it is not posted to newsgroups or distribution lists and that it is not done for commercial gain or part of a commercial transaction. For other uses please contact the publisher.

I3 UPDATE / ENTOVATION International News is a joint publication of David Skyrme Associates Limited and ENTOVATION International Limited - providers of trends analysis, strategic advice and workshops on knowledge management and knowledge innovation®

Email: info@skyrme.com    debra@entovation.com
Web: http://www.skyrme.com    http://www.entovation.com

® Knowledge Innovation is a registered trade mark of ENTOVATION International.